Spring is shearing time for herders who produce cashmere. Trade was disastrous for them last year. The year before a kilogram of cashmere often brought MNT40, 000 but last year one was lucky to sell for MNT16, 000. And much remained unsold.

This year things are looking up, but only marginally. Traders at Melt, a wholesale market in Ulaanbaatar, note that very little has come there from rural areas after Tsagaan Sar. They think this is because Chinese traders have already bought up all the cashmere with the herders. The price they pay is around MNT18, 000 for a kilo.
New cashmere should sell for more, around MNT25, 000. But Chinese traders buy for cash, and buy in quantity, usually taking all that a herder has. This persuades the producer to sell for a lower price. The Chinese have this advantage because they come with adequate loans from their banks. Mongolian buyers cannot match the Chinese offer because they do not have so much ready cash.
There is not much the herders can do with the other things they sell. Lambs’ wool is selling for MNT2, 000, goat skins for MNT5, 000, cow skins for MNT12, 000 and horse skins for MNT25, 000.

 

Source: en.news.mn

Mar 9, 2009